Worcester Business Journal

6 Worcester Business Journal | September 28, 2020 | wbjournal.com BY GRANT WELKER Worcester Business Journal News Editor Worcester yet to finalize PawSox deal, while scope of surrounding development shrinks and is delayed Under negotiation M ore than two years aer Worcester city officials announced the Pawtucket Red Sox were moving to the Canal District, there is no formal lease agreement legally obligating the team to come to Worcester. e city also lacks a binding agree- ment with Boston developer Madison Properties to build a multi-million mixed-use project just outside the ballpark, which the city is relying heavily upon to create new tax revenue to allow the city-owned Polar Park to pay for itself. at development has been delayed so the earliest completion, for a 225-unit residential building, won't take place until September 2022, when the original announcement in 2018 called for the first phase of Madison's development to open in January 2021. A parking garage being relied on for game parking has also been reduced in size, with a delayed opening. And about six months before the minor league baseball team is scheduled to begin play in a new $132-million public stadium, the city government is only now obtaining the property on which the ballpark sits, about 19 months aer the original deadline for it to obtain that deed, even as construction on the project is well underway. While this lack of formal agreements is unusual and behind schedule, they don't mean the PawSox aren't moving to Worcester or the mixed-use project won't happen, especially because the team, the city and the developer all have been very vocal and public about their commitment to the massive develop- ment. e PawSox, for example, held three Worcester ceremonies in the span of one week in August – two for construction milestones and another to unveil the jerseys the team will wear aer it moves. However, the lack of signed doc- uments does give the PawSox and Madison negotiating power over the city, at a time when the construction costs are over budget and the corona- virus pandemic coupled with economic uncertainty calls into question the near-term viability of the surrounding develop- ment. "Once the facility is built, the municipality has zero lever- age," said Marc Edelman, a law professor who specializes in sports law at Baruch College in New York. "As a city, you want to lock in the team that would play there before you build the facility. It's a question of which side should bear the risk." Worcester City Manager Edward Augustus, who has spearheaded the project for the city, has repeatedly said the guiding principle for the city is the stadium will pay for itself. He has stated previously to WBJ the COVID-19 pandemic will have an impact on the stadium's cost and completion timeline, although it was difficult to give spe- cifics amid the uncertainty caused by the pandemic. e last time he gave a formal cost update to the Worcester City Council was January, when the stadium cost increased from $101 million to $132 million, and the anticipated investment by Madison Properties on its surround- ing mixed-use development was lowered from $140 million to $125 million. More broadly, the pandemic has le questions of whether next baseball season could even be played or, if so, whether fans will be allowed at full capac- ity. e 2020 Minor League Baseball season was canceled entirely, while Major League Baseball is playing a truncated season. "You've got a bunch of sig- nificant obstacles," said Nellie Drew, a sports law professor at the University of Buffalo and director of the school's Center for the Advancement of Sport. "You always have risk. ese [projects] are by definition high-risk. You're building, and you're hoping people are going to come." Anticipated cost overruns & who pays for them When the cost of the Polar Park was last estimated in January at $132 million, it was already the second-costliest minor league ballpark ever built, adjusting for inflation, according to a WBJ analysis of ballpark finances across the country. Another $19 million in cost overruns and Polar Park will pass the $150-mil- Worcester City Manager Edward Augustus Polar Park is being built on Madison Street across from a proposed mixed-use development. PHOTO/GRANT WELKER

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